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With all the news about rising student loan debt and disappointing investment returns, this may be a question on your mind if you have tuition bills coming up, whether for you or one of your children. I know it's a question I've received both on our financial helpline and from a friend of mine who was recently accepted to grad school. So let's take a look at some of the factors to consider before raiding your retirement account?

How would you access the money?

There are 3 main ways to get money out of a retirement plan. The worst way is a hardship withdrawal from your current employer's plan. That's because the withdrawal would be subject to a 10% penalty if you're under age 59 1/2 and you may not be able to contribute to your plan for as long as 6 months, which means you could miss out on part of your employer's match too.

Instead of taking a withdrawal, you might be able to borrow from your plan. The advantage here is that you can repay the money back and avoid taxes and penalties and the interest goes back into your own account. The disadvantage is that the loan usually has to be paid back within 5 years so those payments can be pretty steep. If you leave your job, any remaining loan balance after 60 days could also be considered a withdrawal and subject to taxes and penalties.

If you have IRAs (or previous employer plans that can be rolled into an IRA), this may be your best bet. That's because IRAs can be used for higher education expenses penalty-free and don't need to be paid back. You may still have to pay taxes on the withdrawal but if you take the withdrawal in a year that you reduce your work hours, you could end up paying little or no taxes on it since you'll likely be in a lower tax bracket. (Roth contributions can be withdrawn tax-free for any purpose, including education expenses.)

What else would this cost you?

If you're not paying a tax penalty, it may seem like the answer is nothing, especially compared to the interest you'd pay on a student loan. However, there is also something economists call opportunity cost, which is the gain that you're giving up by not having that money invested in your retirement plan. While that opportunity cost may not have been very high over the last few years (or even negative if you lost money in the market), future returns are a different story. In fact, periods of below average returns in the stock market tend to be followed by period of above average returns (economists call this "reversion to the mean.") How much depends on how aggressively you invest. As a rule of thumb, I estimate aggressive portfolios (about 80% or more in stock) to earn about 8% over the long run, moderate portfolios (about 60% in stock) to earn about 6%, and conservative portfolios (about 40% or less in stock) about 4%.

Of course, the other side of the equation is what you'd be otherwise paying in student loan interest. This also depends on what you can qualify for, although student loans are relatively low across the board and may also be tax-deductible. That's why it's generally considered "good debt," along with mortgage and car loans, and preferable to depleting a retirement account for most people.

How would this affect your retirement?

Will this mean having work longer or retire with less income? This factor really applies more if you're a parent of a child. If it's for your own education, you can always use the savings from lower loan payments to contribute more to your retirement plans and make up the difference (assuming you have the discipline to do that). On the other hand, I wouldn't count on Junior contributing to your retirement fund. If you're thinking of using your retirement account for your child's education, you might want to run a retirement estimator and see what difference it would make to your retirement.

This brings us to another issue. No matter how much we love our children, we should always make sure our retirement is on track before contributing to their education. Think of how airplanes tell us to secure our own oxygen mask in an emergency before we help our children with theirs. If your own finances are in good shape, you can always help your kids pay back their loans but unfortunately, there's no financial aid for retirement.

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Are you looking for an unbiased answer to your own financial question? Once a week, we’ll be responding on this blog to questions from our Financial Helpline or posted on our Twitter or Facebook site.

Erik Carter, JD, CFP® is a resident financial planner at Financial Finesse, the leading provider of unbiased financial education for employers nationwide, delivered by on-staff CERTIFIED FINANCIAL PLANNER™ professionals. For additional financial tips and insights, follow Financial Finesse on Twitter and become a fan on Facebook.